Can South Korea regain its edge in innovation?
South Korea’s reputation as a leading innovator is under threat. In a benchmarking report released by the country’s Ministry of Science and ICT in February, South Korea had slipped behind China in science and technology development for the first time. The report analysed research papers, patents and expert surveys in 11 technology areas, including information and communications technology, defence and nanoscience.
Such performance metrics are taken very seriously in South Korea, says Martin Hemmert, a global business researcher at Korea University Business School in Seoul. “This kind of benchmarking is a national obsession, and they will always find a data point telling them they’re not doing well enough,” he says. The report showed that South Korea had continued to close the technology gap to the United States, but being surpassed by China in the ranking was what made national headlines.
“Koreans themselves would tell you that they’re not very good at R&D — even though, from an international perspective, the country is obviously a stellar performer,” says Sung-Young Kim, a political scientist at Macquarie University in Sydney, Australia, who studies the role of government in East Asia’s economic transformation. For a country that has achieved remarkable economic development, a slowdown, especially compared with its competitors, is a source of anxiety for many South Koreans.
In the wake of the Korean war, which split the country into the Soviet-influenced north and the US-influenced south in 1953, South Korea was one of the world’s poorest and least developed nations. From the early 1960s, its strategic focus on manufacturing and export fostered a period of rapid economic growth referred to as the Miracle on the Han River. By 2018, South Korea’s GDP per person measured at purchasing power parity — a metric that adjusts GDP to account for price differences between countries — surpassed that of Japan. “South Korea has become famous for mobilizing science and technology for industrialization and economic advancement,” says So Young Kim, a science and technology policy researcher at the Korea Advanced Institute of Science and Technology (KAIST) in Daejeon.
Yet signs that the country is losing momentum are hard to ignore. In the 1980s, South Korea’s compound annual growth rate of GDP per person reached almost 12%, but had slowed to 7.2% in the 1990s, 4.8% in the 2000s and 2.4% in the 2010s. This figure has since stabilized while remaining below that of other advanced economies, including Canada and Italy. “We have been growing slower and slower, and the government is quite worried,” says So Young Kim, who was appointed to chair a presidential commission in March, to propose solutions. “The new administration has been trying to revamp policies, institutions and funding structures to regain strength in science and technology, so that we can have another Miracle on the Han River.”
Picking winners
South Korea’s history has had a big impact on the national psyche, especially its development of innovative military technology, says Sung-Young Kim. “It forged this mentality that technology is a source of national security,” he says. The government designated strategic growth areas and pooled the nation’s limited public and private resources to enable the change. Information and communications technology was one such priority area. Today, South Korea is a leader in fast broadband and next-generation mobile communications, but 50 years ago, there was an 18-month wait to connect a phone to the country’s antiquated network, says James Larson, who arrived as a peace corps volunteer in 1971 and now studies digital development at the State University of New York Korea, a campus of the US university located in Incheon.
To achieve development and growth in telecommunications and other priority areas, buy-in from the corporate sector was crucial. “The key incentive for companies that participated in state projects was the potential to completely dominate an industry,” says Sung-Young Kim. The strategy catapulted a handful of companies, including Samsung and Hyundai — originally a food exporter and a local construction firm, respectively — into some of the world’s most successful conglomerates. But funds were never given freely. “The government would attach monitorable performance outcomes, and the president would sit in on meetings and stipulate targets for companies,” says Sung-Young Kim. During South Korea’s period of military rule, from 1961 to 1993, repercussions for missed targets ranged from being cut from further funding to jail time imposed for company bosses whose performance lagged.
The methods that today’s democratically elected South Korean government uses to support economic development have evolved, but the philosophy of strategic investment tied to detailed performance metrics remains. The question now is whether such an approach can deliver the same results when the companies that were once propelled by government funding and projects have become global behemoths that are not so easy to influence.
SECTOR SWAP
Most of the leading countries in the Nature Index recorded low domestic mobility for researchers between academia and industry for the period 2021 to 2024, according to a League of Scholars analysis. South Korea has shown greater cross-sector mobility in the past, and factors such as the COVID-19 pandemic and worsening links between universities and companies could be at play. Circles are sized by the number of institutions that saw talent movement during the period 2021–24.
Manufacturing, meanwhile, is more reliant than ever on international supply chains, which are increasingly vulnerable. The COVID-19 pandemic and Ukraine and Gaza wars have created challenging conditions for South Korea’s export-oriented economy, as have heightened tensions between China and the United States. “With the US–China trade war, South Korea is again sandwiched between two great powers and finds that the only way it can really survive is, again, by digging into its strength in technological development,” says Sung-Young Kim.
Leveraging the innovation capacity of South Korea’s well-funded academic research is a strategy worth pursing, according to a report published by the Organisation for Economic Co-operation and Development (OECD) in 2023 (see https://doi.org/m8q9). But the government’s characteristic approach of prioritizing sectors and micro-managing the research it funds doesn’t necessarily foster innovation in the academic sector, says Hemmert, who contributed to the report.
Read the full article: https://www.nature.com/articles/d41586-024-02689-8
